girl needs to know if her car title is lien-free

How To Find Out If Your Car’s Title Is “Lien-Free”

A lien-free title on a car means that the car is completely owned by the driver and has no loans taken out against it. Before purchasing a new car, you must always check the paperwork and get a history on the car, which will tell you if it is lien-free. In order to qualify for a car title loan online, you must have a lien-free title on your car. An auto lien is the right to take possession of a car while debt is owed. Liens are contractual agreements that allow others to have the right to your property.

What is the Purpose of a Lien?

The purpose of a lien is simple. A lien is an insurance policy for the lienholder. Let’s take a car title loan for example. Let’s say that you would like to take out a car title loan online, which means you will be taking out a loan in accordance with the value of your car. After your car is evaluated and priced, and once you have been given that amount in a loan, the lender then becomes a lienholder.


girl doing research on lien-free title

As a lienholder, your lender can now access your car should you miss a payment or default on your loan completely. It is an incentive to make sure you responsibly pay back your title loan online and ensures that if you don’t, your lender is not left out to dry. A lien is what makes a title loan a secured loan. It is ideal to have a lien-free title for your car because it means you fully own the vehicle.

What is the Advantage of a Lien?

A lien is a legal claim that a creditor or a third party has over your property until you pay off a debt or fulfill an obligation. A lien can give you some advantages if you are the one who holds it and allows approval for loans.

Liens Make Loans Safer

It is both good for the lender and the borrower as it allows the lender collateral should you decide not to pay back what you took on the loan, and it also makes sure that the borrower gets the money that they need and from a responsible lender. As long as you make payments on your loan, you retain ownership of your car and the lien is not “in effect”.

Liens provide security, but they are often part of public records and will notify other lenders that you do not have a lien-free title to your car. This means you will be unable to take out a title loan online if you have a previous lien on your car.

girl found out that her title is lien-free

How to Qualify for a Title Loan Online

What’s nice about At Home Title Loans is that you do not necessarily need good credit to apply for an online title loan. Since a title loan is a secured loan, the lender does not rely on your credit score as proof that you will pay—the lien on the car provides that incentive. There are several things you must have before applying for a title loan online:

  • A clear vehicle title
  • Copy of your driver's license or Government-issued ID
  • Proof of income

As explained above, a lien is like a stamp on your car that says you have taken out a loan and have not yet paid it back, and if you don’t, the car is signed away to the lender. Of course, a new lender won’t want to give out a title loan if they can’t secure it with the car in question. If you already have taken out a previous title loan online and need a new one, you must first settle the old account.

You can always double-check to make sure there is no lien on your car by going to your state DMV site and seeing if they have a title checker feature. It varies by state, but most have this feature. It allows you to put in the VIN number and pull up the title information on record. You should be able to determine if the car has a lien against it.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.

June Mckaig

June Mckaig writes articles on finance and budgeting, hoping to provide insight amidst the overwhelming crowds of information on the internet. She feels that with all this accessibility comes a lot of false data, and she would like to contribute astute, helpful input that she knows can help others. If you would like to learn more about June's research, read more here.